US trade vote puts TTIP on faster track

Following Congress’ hard-fought approval of “fast-track” trade authority last week, U.S. Trade Representative Michael Froman vowed not only to complete the 12-nation Trans-Pacific Partnership but an even bigger pact with the European Union and three other major trade deals — all in the 18 months remaining in President Barack Obama’s term.

It could add up to the biggest trade blitz in history, transforming the rules under which the world does business.

“We’ve got a lot of pots on the stove,” Froman told POLITICO while watching senators cast their final votes to send the legislation to the president. “We want to get TPP done and through Congress. We want to get TTIP negotiated. We’re going to finish ITA. I’m hoping to finish EGA and TISA.”

Those would be, in order: the Transatlantic Trade and Investment Partnership agreement with the European Union, an even bigger pact than the TPP in terms of economic size; the World Trade Organization’s Information Technology Agreement, which covers about 97 percent of world IT trade; the Environmental Goods Agreement, accounting for 86 percent international commerce in green goods; and the 24-party Trade in International Services Agreement, which involves three-quarters of the United States’ gross domestic product and two-thirds of the world’s services, such as banking and communications.

Obama signed the fast-track law on Monday. Now, Froman aims to wrap up the talks on the trans-Pacific deal, covering nearly 40 percent of world economic output, this summer, setting the stage for another intense trade debate in Congress and vote on the pact before winter begins. He could finish the equally ambitious agreement with the European Union and the slew of other potential trade deals before leaving office, including an investment pact with China, and work to ensure that World Trade Organization members actually implement an agreement to facilitate cross-border trade.

“Next year, people may be talking about a lame-duck administration, but it’s not going to seem that way to Mike Froman,” said Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics. “He’s going to continue to have a full plate of work and negotiations and maybe even some new initiatives.”

It would have been a much different situation if Congress had rejected the trade promotion authority bill, which will allow Obama to submit trade agreements to Congress for straight up-or-down votes without any amendments. That easily could have turned the Office of the U.S. Trade Representative into a sleepy backwater, biding time for the next administration, instead of making it the key architect of Obama’s foreign economic policy legacy.

Still, Froman would be lucky to conclude all the deals within his sights, particularly the TTIP pact with the EU, where negotiators are wrestling with difficult issues ranging from the right to use some common food names to data privacy concerns that have grown in Europe in the wake of NSA spying revelations.

“Getting TPP on this administration’s watch is probably the best that they can hope for,” said Dan Ikenson, the libertarian Cato Institute’s director of trade policy studies. “TTIP — I just think no way.”

Illustrating how unexpected problems can crop up, a deal to expand the 1996 Information Technology Agreement to a new generation of goods seemed within reach last year, but stalled at the last moment when China balked at South Korea’s demands to phase out tariffs on flat-screen TVs.

Clinching the environmental goods and the international services pacts could be possible by 2017, but that depends on countries making credible offers to open their markets, and the signs have been mixed on that, Ikenson said.

Froman, who just marked his second year on the job, has been running full tilt for months on fast track alone, helping to round up votes with only minimal help from House and Senate Democratic leaders and strident opposition from many in the party. With opponents of the legislation now shifting their efforts to the defeat of the actual Asia-Pacific agreement, there’s no sign the frenetic pace will slacken.

“The general rule has been if I’m not abroad at one of these negotiations, I’m spending an awful lot of time on the Hill, and that’s only become more intense in the last couple of months,” Froman said. “We’ve been going up and meeting with the caucus, the committees, individual members. I’ve been traveling to their districts if they wanted me to come and do events with them, meet with their labor folks and their environmental folks.”

Froman has held more than 350 briefings with lawmakers on the Trans-Pacific Partnership out of the 1,800 his agency has conducted over the past several years, according to the office. That helped produce a respectable 13 Democratic votes for trade promotion authority in the Senate but only 28 in the House in the face of an all-out effort by labor groups to kill the legislation.

But many Democrats complain the administration — and Froman in particular — have not seriously considered their ideas for improving the Trans-Pacific Partnership, despite the huge number of meetings.

“I would say it was exceedingly disappointing that consultations meant cheerleading sessions, perhaps listening to what we said, but never responding,” Rep. Lloyd Doggett (D-Texas) said. “The whole notion that the administration would send over their lawyer for USTR to help reject Democratic amendments [during the Ways and Means markup of the fast-track bill] indicated what a one-sided process this was.”

“He was there to pitch it and sell it,” added Rep. Raul Grijalva (D-Ariz.). “The presentations he gave were all about, ‘We’ll work out those details later.’ Our concerns were upfront concerns.” Grijalva explained that he and other Democrats wanted the bill to be more explicit about requiring labor and environmental protections in the pact.

Froman said he is confident there would be broad support for how the administration has addressed those concerns. “A lot of opposition we heard during this debate on TPP was based on myth and misinformation,” he said. “I can’t wait for this thing to be done and fully out there in public to say, ‘We told you this was going to have fully enforceable and binding labor obligations, and it does.’”

He also dismissed Republican concerns that the final deal could stress Democratic priorities at the expense of more traditional free trade objectives, such as eliminating foreign tariffs on U.S. farm and manufactured goods and strengthening intellectual property protections.

“I don’t see it as a trade-off,” he said. “We’re pursuing ambitious comprehensive market access, and we’re going product by product — sometimes line by line — to make sure we get the right outcome. I view raising labor and environmental standards as a part of our effort to level the playing field. And I think Republicans also care about leveling the playing field for American workers and American firms.”

Froman has spent countless hours crisscrossing the globe to iron out the details of the Asia-Pacific and European trade deals. A trans-Pacific trade deal by mid-August would set the stage for the leaders of the TPP countries to seal the deal by November, when they will be in the Philippines for the annual Asia Pacific Economic Cooperation meeting.

The long days and late nights during the months of debate on trade promotion authority included a pair of gut-wrenching moments in the Senate and House, when it appeared Democrats were successful in defeating the bill. But Froman said he never despaired: “You can’t do my job without being optimistic. … And I was optimistic it would happen in the end. But we also knew it was going to be extremely difficult.”

Ultimately, the final Senate vote was anti-climatic, with only a simple majority needed after meeting the 60-vote threshold Tuesday to limit debate on the bill. Froman frequently broke off the conversation to keep an eye on the tally. “51. The bill passes,” he said, savoring the moment with his chief spokesman Matthew McAlvanah. “All right. There you go. We can officially say TPA is done.”

A day earlier, there was a bit more anxiety when the yes tally seemed stuck at 59, Froman said. “We were all wondering who were the five senators who hadn’t voted yet.” When Sen. Dean Heller (R-Nev.) became the deciding vote, giving the White House trade promotion authority for the first time since July 1, 2007, “it was a great moment,” Froman said.

Now battle-tested, the administration will be better prepared for the looming TPP fight, he said.

“[W]e’ve already laid the groundwork in this debate …” Froman said. “We’re going to be very proactive about continuing to make the case for TPP.”

Rep. Sander Levin, the top Democrat on the Ways and Means Committee and a party leader on trade, said Froman and the administration are imperiling the chances of the pact’s approval by failing to address an array of Democratic, environmental and labor concerns, as well as those of health advocates, who worry about the deal’s impact on the prices of medicine.

The White House’s narrow victory on fast track “was a very strong signal that these negotiations are on the wrong track, and I would think the administration would try to heed that signal and try now to tackle the main outstanding issues in a way that would make good trade policy,” Levin said. “We’ll see.”

But Froman — the man whose job it is to be optimistic — said he was hopeful the administration could hold onto the 28 Democrats who voted for fast track once the Trans-Pacific Partnership goes before Congress, and possibly pick up additional support.

“We can’t take them for granted,” Froman said. “They’re going to want to see what’s in TPP itself. But nor do I see that as a ceiling because there were a lot of Democrats who said, ‘Don’t count me out on TPP. I want to see what’s in it. I fundamentally agree with you on the substance, but the politics are just too hard on TPA.’”

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JR

Now Vice Chairman of EU Commission Timmermans May 1st in Washington:
“Let me finish on this. We have taken each other for granted for too long, the Americans and the Europeans. We will be able to set a course for the future of this world if we stick together.
It is very simple, if we are able to see the Transatlantic Trade and Investment Partnership (TTIP) for what it is: not a free trade agreement. TTIP is a geostrategic agreement. It is a political agreement. It should not be left up to people who know everything about the way you slaughter chickens. It should be something our political leaders should take up and decide on soon. When you have TTIP in place, it will change the nature of the game globally. Because then the United States and Europe will set the rules of the game, and the others will follow suit, including China, Japan and others. ”

So it seems a geopolitical treaty is being brought in through the back door of EU trade policy evading the democratic control of national parliaments still responsible for foreign policy, which has not been delegated to the EU.